The Wall Street Journal this morning reports that “President-elect Barack Obama and congressional leaders plan to move soon to block the estate tax from disappearing in 2010,” and that “Democrats are determined to act quickly to prevent the estate tax's scheduled repeal. Elimination of the levy on big inheritances was approved by Congress under President George W. Bush in 2001, with rollbacks phased in slowly and its full elimination slated to take effect next year.
“The Senate Finance Committee will move within weeks on legislation to reverse that law, and Mr. Obama is expected to detail his estate-tax preservation proposal in his budget next month, congressional tax writers said.”
The Obama plan, as originally laid out during the presidential campaign, would make permanent the 2009 rates and exemptions, making estates of up to $3.5 million - $7 million for couples – free from the estate tax. Everything above that level would be taxed at 45 percent. Before the phased in repeal was passed in 2001, estates over $1 million were taxed at a 55 percent rate.
The Journal writes that “for small-business groups, farmers' associations and the affluent families that created and bankrolled the ‘Death Tax’ repeal effort, the emerging Democratic plan marks a stark defeat. Advocates of killing off the tax say the emerging Obama policy is the wrong medicine for the recession, arguing the levy is economically burdensome like the income tax. Bill Rys, tax counsel for the National Federation of Independent Business, said small businesses struggling with falling sales and layoffs shouldn't have to devote resources to estate planning.”
Elimination of the estate tax has also been a major priority of organizations such as the Food Marketing Institute (FMI) and National Grocers Association (NGA).
The Journal notes that the new Congress feels the need to act quickly on the estate tax since it feels that it would be politically a lot tougher to reinstate it at any level if it is allowed to lapse completely.
“The Senate Finance Committee will move within weeks on legislation to reverse that law, and Mr. Obama is expected to detail his estate-tax preservation proposal in his budget next month, congressional tax writers said.”
The Obama plan, as originally laid out during the presidential campaign, would make permanent the 2009 rates and exemptions, making estates of up to $3.5 million - $7 million for couples – free from the estate tax. Everything above that level would be taxed at 45 percent. Before the phased in repeal was passed in 2001, estates over $1 million were taxed at a 55 percent rate.
The Journal writes that “for small-business groups, farmers' associations and the affluent families that created and bankrolled the ‘Death Tax’ repeal effort, the emerging Democratic plan marks a stark defeat. Advocates of killing off the tax say the emerging Obama policy is the wrong medicine for the recession, arguing the levy is economically burdensome like the income tax. Bill Rys, tax counsel for the National Federation of Independent Business, said small businesses struggling with falling sales and layoffs shouldn't have to devote resources to estate planning.”
Elimination of the estate tax has also been a major priority of organizations such as the Food Marketing Institute (FMI) and National Grocers Association (NGA).
The Journal notes that the new Congress feels the need to act quickly on the estate tax since it feels that it would be politically a lot tougher to reinstate it at any level if it is allowed to lapse completely.
- KC's View:
